Money fund banking system with multiple banks and/or rates

ABSTRACT

A method, system and program product for managing a plurality of individual client deposits for multiple clients, the method comprising: accessing, an electronic database, comprising: aggregated account information for a plurality of Federal Deposit Insurance Corporation (FDIC)-insured and interest-bearing aggregated deposit accounts held in a plurality of banking institutions, and client information for each of a plurality of the respective clients, i, comprising (i) a total of a respective client&#39;s funds deposited across a plurality of the FDIC-insured interest-bearing aggregated accounts held in a plurality of the banking institutions; and (ii) a maximum deposit percentage of the respective client funds to be held in at least one of the banking institutions; maintaining funds for said individual clients in a plurality of the FDIC-insured, interest-bearing aggregated deposit accounts at a plurality of banking institutions, wherein each of the banking institutions has at least one of the aggregated deposit accounts; processing, by computer, client transaction data comprising data for each of one or more deposits/transfers and/or one or more withdrawals/transfers for one or more of said clients, with the data comprising a respective amount for each respective deposit/transfer and each respective withdrawal/transfer; making needed deposits to, or needed withdrawals from one or more of said aggregated deposit accounts based on the data for one or more of the deposit/transfers and/or the withdrawals/transfers and based, at least in part, on the maximum deposit percentage in the database for one or more of the clients; and updating the database based on the client&#39;s deposits/transfers and/or withdrawals/transfers.

CROSS-REFERENCE TO RELATED PATENT APPLICATIONS

This application is a Continuation of U.S. application Ser. No. 09/677,535, filed Oct. 2, 2000, which is incorporated herein by reference in its entirety, which is a Continuation-In-Part of U.S. application Ser. No. 09/176,340, filed Oct. 21, 1998, now U.S. Pat. No. 6,374,231, incorporated herein by reference in its entirety.

BACKGROUND OF THE INVENTION

1. Field of the Invention

This invention generally relates to the field of account transaction processing, and more specifically, an improved system for processing and administering a demand account or money market account in combination with an insured deposit account, and optionally where the accounts are distributed over a plurality of banking institutions.

2. The State of the Art

The Federal Deposit Insurance Corporation (“FDIC”) is a federal governmental entity that provides insurance for deposits in most banks and savings institutions in the United States Bank; deposits are insured by the FDIC's Bank Insurance Fund (“BIF”) and savings institutions' deposits are insured by the FDIC's Savings Association Insurance Fund (“SAIF”). The rules governing insurance of deposits of institutions insured by the BIF and the SAIF are the same. The FDIC bases insurance coverage on the concept of ownership rights and capacities: funds held in different ownership categories are insured separately from each other; and funds owned by the same entity but held in different accounts are subsumed under the same insurance coverage. The amount of insurance coverage provided to depositors of each institution insured by BIF and SAIF is the same: $100,000.00 to the owners(s) of the funds in the account(s), including principal and interest.

As disclosed in our prior application Ser. No. 09/176,340 referenced above, a system is provided for managing a plurality of demand accounts for multiple clients whose funds are held at a banking institution in a single insured deposit account. That system provides an entity with the ability to deposit funds into a demand account from various sources, and to make payments from the demand account via different instruments, without the limitation as to the number of transfers, and still earn interest on the funds in the clients' accounts because the funds are effectively maintained in a deposit account. Even with the above-mentioned innovative system, investors carrying amounts in excess of $100,000 in their accounts are disadvantaged because the FDIC insurance is limited to $100,000, so any amount over $100,000 is not protected by FDIC insurance. It was with this realization that the present invention was made.

SUMMARY OF THE INVENTION

In one embodiment, a method is disclosed for managing a plurality of individual client deposits for multiple clients, comprising: accessing, by a computer, in the performance of one or more of the following steps, an electronic database, stored on one or more computer-readable media, comprising: aggregated account information for a plurality of Federal Deposit Insurance Corporation (FDIC)-insured and interest-bearing aggregated deposit accounts held in a plurality of banking institutions, wherein funds from client deposits of a plurality of clients are aggregated with funds of other client deposits in the aggregated deposit accounts held in the banking institutions; client information for each of a plurality of the respective clients, i, comprising: (i) a total of a respective client's funds deposited across a plurality of the FDIC-insured interest-bearing aggregated accounts held in a plurality of the banking institutions; and (ii) a maximum deposit percentage of the respective client funds to be held in at least one of the banking institutions; maintaining funds for said individual clients in a plurality of the FDIC-insured, interest-bearing aggregated deposit accounts at a plurality of banking institutions, wherein each of the banking institutions has at least one of the aggregated deposit accounts; processing, by computer, client transaction data comprising data for each of one or more deposits/transfers and/or one or more withdrawals/transfers for one or more of said clients, with the data comprising a respective amount for each respective deposit/transfer and each respective withdrawal/transfer; making needed deposits to, or needed withdrawals from one or more of said aggregated deposit accounts based on the data for one or more of the deposit/transfers and/or the withdrawals/transfers and based, at least in part, on the maximum deposit percentage in the database for one or more of the clients; and updating the database based on the client's deposits/transfers and/or withdrawals/transfers.

In a further embodiment, a method is disclosed for managing a plurality of individual client deposits for multiple clients, comprising: receiving from one or more respective clients a respective maximum amount that is less than a Federal Deposit Insurance Corporation (FDIC) insurance limit, which respective maximum amount is to be held in at least one of the banking institutions for that respective client, and storing this maximum amount associated with the respective client in an electronic database; accessing, by a computer, in the performance of one or more of the following steps, the electronic database, stored on one or more computer-readable media, comprising: aggregated account information for a plurality of Federal Deposit Insurance Corporation (FDIC)-insured and interest-bearing aggregated deposit accounts held in a plurality of banking institutions, wherein funds from client deposits of a plurality of clients are aggregated with funds of other client deposits in the aggregated deposit accounts held in the banking institutions; client information for each of a plurality of the respective clients, i, comprising: (i) a total of a respective client's funds deposited across a plurality of the FDIC-insured interest-bearing aggregated accounts held in a plurality of the banking institutions; and (ii) a respective maximum amount to be held in at least one of the respective banking institutions; maintaining funds for said individual clients in a plurality of the FDIC-insured, interest-bearing aggregated deposit accounts at a plurality of the banking institutions, wherein each of the banking institutions has at least one of the aggregated deposit accounts; processing, by computer, client transaction data comprising data for each of one or more deposits/transfers and/or one or more withdrawals/transfers for one or more of said clients, with the data comprising a respective amount for each respective deposit/transfer and each respective withdrawal/transfer; making needed deposits to, or needed withdrawals from one or more of said aggregated deposit accounts based on the data for one or more of the deposit/transfers and/or one or more of the withdrawals/transfers and in compliance with the respective maximum amount specified in the database for one or more of the respective clients for one or more of the banking institutions; and updating the database based on the client's deposits/transfers and/or withdrawals/transfers.

In one embodiment, a system is also disclosed for managing a plurality of demand accounts for multiple clients whose funds are held at a banking institution in a single insured deposit account.

In another embodiment, a system is disclosed for managing a plurality of demand accounts for multiple clients whose funds are held at one or more banking institutions in one or more single insured deposit accounts that, from the viewpoint of the investor, removes the $100,000 limitation of FDIC insurance for that individual investor.

In another embodiment, a system is disclosed for administering a plurality of accounts containing in excess of the FDIC or other insurance limit and continue to qualify for FDIC insurance.

In a further embodiment, a system is disclosed that administers individual client deposits to and withdrawals from each of their demand accounts. The system includes a database having each client's information for each account administered. The system monitors the use of the funds from each account by selectively authorizing or rejecting each demand payment request for each account of a particular client. Periodically, net transaction information is determined from the sum of the demand account deposits and withdrawals. The net transaction information is used to determine whether to deposit funds or to withdraw funds from a single deposit account to a client's demand account(s) while updating the database for each client's deposit and authorized demand payment. The system then determines whether each client's account contains more than a specified amount (e.g., $90,000) and distributes any amounts over the specified amount into another account at a preselected banking institution.

In practice, when an investor's account balance exceeds $90,000 in any one account, the excess funds are automatically moved to a second deposit account at another preselected bank. The client will maintain one insured deposit clearance account while the multiple deposit accounts will be transparent to the investor. All transactions to and from the accounts will post to the investor's insured deposit account, although they may be debited from multiple deposit accounts held at various banks. At the time an Insured Deposit Account is opened, the investor is given the option to choose a preferred bank, to choose a list of preferred banks in a desired (or random) order of preference, and to exclude one or more banks. The system will debit and credit the multiple deposit accounts on the investor's behalf, and in the event that the investor does not preselect a bank, the system will automatically designate a bank or banks. The client may also select the order of preference for deposits and withdrawals. For example, if the investor opened his Insured Deposit Account with $170,000, he could also indicate that his assets should be invested in Bank A and Bank C. He may also indicate that bank C is preferred. In this example, $90,000 would be deposited into Bank C and $80,000 into Bank A. If a check were written or the investor chose to redeem funds directly, the withdrawals would be made from Bank A. Withdrawals would not be made from Bank C until all funds had been redeemed from Bank A. Similarly, if the investor chose Bank C as preferred and chose to exclude Bank B, then $90,000 would be deposited into Bank C and $80,000 into Bank A. The investor also can choose the deposit cap for each of multiple banks selected, or can specify deposit caps for default banks chosen by the system (e.g., no bank to hold more than 40% of the investor's funds). Of course, the investor can also specify that all funds be held in a single bank, even if the amount exceeds $100,000. The report the investor receives may refer to all of the assets and transactions in the investor's Insured Clearance Account (a single account), or the investor may be shown a report listing all of the sub-accounts (if any) where the funds are held and in which transactions occurred.

The choice of Banks is held on the investor's account and the system will read the Bank indicator and determine which bank deposit account should be debited or credited. The system will automatically group together all transactions for each bank. At the end of the business day the deposit accounts at the various banks with be either debited or credited. The debit or credit to the deposit account is the net transaction for all activity that occurred that day.

As a result of the present invention the investor earns interest on the balance in his Insured Deposit Account where the interest rate earned can be the same regardless of the bank(s) selected, or may vary depending on the banks selected, while continuing to qualify his account funds for FDIC insurance.

BRIEF DESCRIPTION OF THE DRAWINGS

In the drawings, in which like references characters designate like or corresponding parts throughout the several views, the views are:

FIG. 1A is a flowchart depicting processing steps the system follows at the administrator's end.

FIG. 1B is a flow chart depicting additional processing steps according to the present invention.

FIG. 2 is a flowchart depicting processing steps regarding the determination of a available funds according to the present invention.

FIG. 3 is a flow chart depicting processing steps associated with the completion of the banking system process according to the present invention.

DETAILED DESCRIPTION OF SPECIFIC EMBODIMENTS

The present invention will be described with reference to an administrator, which can be a brokerage firm, a bank, or another financial entity with which clients can institute financial transactions such as deposits and demand payments. The administrator appears to each client as if it were, at least in part, a bank, by accepting deposits for the client's accounts and by authorizing (and then making) payments demanded by the client from his or her account. The funds for all of the clients are pooled into a single deposit account that is maintained as an insured deposit account at a licensed banking institution.

Referring to FIG. 1A, the financial entity 100, which may be a bank, a brokerage or another entity where financial transactions take place or can be facilitated, creates transaction files 101 which are transmitted to Reserve 105; Reserve (or the Reserve System) is the administrator or other entity in charge of administering at least one of the deposit accounts. New account files 102 can be transmitted to Reserve; a new investor account may need to be opened; a new account means organizing and coordinating information to service a new investor for the present system, even though that investor may already be a client of a financial entity 100 for other investment vehicles. A new account 102 becomes part of an existing bank deposit account 129 that collects earned income 130 which transfers the client's income to the client's accounts 131; of course at some time the deposit account must be established with clients' funds. The transaction files represent the addition of funds by check (such as drawn on another institution, or a different demand account from the same institution), wire or electronic transfer, ACH, credits (such as from a debit or credit card merchant), or a sweep from one of the client's other accounts. Accordingly, encompassed in the transaction file are deposits 103 and withdrawals 104. A “sweep” includes the automatic transfer of funds, such as the automated transfer of interest from one account into the client's account, as well as the automated transfer of funds out of the client's account (such as for payment of a securities trade); thus, a sweep may be from one of the client's accounts to another. The responsibility for maintaining the deposit account can be assigned by the administrator to a third party.

Referring now to FIG. 1B, the Reserve System 50 contains an insured deposit database 75 where a position file for debit/credit card users is created 132 and transmitted to a bank for a debit/credit card network 133 where the bank then updates the network 134. The system updates the data base 75 and processes transactions 106 (from 105, FIG. 1A) and opens a new account 107 where application and check deposits are processed 110. The bank preference 107A is the list of banks and the order of preference for deposits and withdrawals held on the account, including a list of banks to be excluded (if any), and the maximum percentage and/or amount of funds to be held in each bank. The client's bank preference data is added to the account at 107B. If the client does not select values for any of these variables, the system can provide default values for the banks and their order at 107C sufficient for all of the client's funds. When possible the system will not assign a bank that is in the same state in which the client resides.

Referring to FIG. 2 it can be seen that when a deposit, either a check deposit 111, federal wire deposit 112, ACH deposit, sweep, or other deposit is credited to the client's account 108, the system will review where the existing funds of the accounts are deposited 108A. If the client's balance has reached the maximum allowable balance for the existing bank 108B, as shown in FIG. 3, the system will then select the next bank on the preference list attached to the account 108C. If the maximum allowable balance has not been reached in the existing bank, the system will credit the additional funds to that bank 108D.

Still referring to FIG. 2, the procedure for processing withdrawals can be seen. Various methods of withdrawing funds are debit withdrawal 109, processing debit or credit card transactions such as debit/credit card files 115, direct debit accounts 215, and processing of files 121. Processing of a debit/credit card file 115 utilizes data accumulated from debit/credit card transactions received from the banks 114. The processing of file 121 procedure utilizes one of various sources of data such as a check presented for payment 116, ACH debits 117, touch tone bill paying 118, and/or interne bill paying 119.

After processing the debit procedure, the system will review the bank preference list and select the appropriate bank to debit 125A. The system will sort all the daily transactions by the bank 125B (see FIG. 3). The activity for each bank will then be netted 126 and the appropriate deposit or withdrawals made.

The system will then determine whether funds are available 122, which function is also associated with other participant withdrawals 120. If the funds are available, the account is debited 225. If the funds are not available, however, the system determines whether a credit line is available 123. If a credit line is available, then funds are advanced 230 to cover the debit; if not the transaction is rejected 124.

Referring to FIG. 3, as previously stated the system determines whether the client's balance reaches its maximum 108B and if so the next bank on the list selected by the client is credited 108C. If the maximum is not reached the existing bank is credited 108D. Information and activities associated with processed debits and credits of the client's accounts from 125A are sorted by the bank 125B and the net activity by the bank is determined 126. The system then determines whether the deposits and credits were greater than the withdrawals and debits 240 and if so, the excess funds are deposited into a deposit account 127. If the debits and withdrawals were greater than the credits the difference is redeemed from the deposit account 128.

Thus, by practicing this invention, the client is provided with FDIC insurance in excess of $100,000.00 because the client's holdings are maintained in multiple insured deposit accounts, which may be in multiple banks.

The foregoing description is meant to be illustrative and not limiting. Various changes, modifications, and additions may become apparent to the skilled artisan upon a perusal of this specification, and as such are meant to be within the scope and spirit of the invention as defined by the Claims. 

1. A method for managing a plurality of individual client deposits for multiple clients, comprising: accessing, by a computer, in the performance of one or more of the following steps, an electronic database, stored on one or more computer-readable media, comprising: aggregated account information for a plurality of Federal Deposit Insurance Corporation (FDIC)-insured and interest-bearing aggregated deposit accounts held in a first plurality of banking institutions, wherein funds from client deposits of a plurality of clients are aggregated with funds of other client deposits in the aggregated deposit accounts held in the banking institutions; client information for each of a plurality of the respective clients, comprising: (i) a total of the respective client's funds deposited across a plurality of the banking institutions in one or more of the FDIC-insured interest-bearing aggregated accounts held therein; and (ii) a maximum deposit percentage of the respective client funds to be held in at least one of the banking institutions; allocating, by the computer, the client funds among a second plurality of the banking institutions in one or more aggregated deposit accounts held therein, based, at least in part, on the maximum deposit percentage in the database for one or more of the clients; netting for at least one of the respective banking institutions, by the computer, client funds allocated to the one respective banking institution to obtain a net amount of funds for the at least one respective banking institution; determining an amount of funds to be transferred to or from one or more of said aggregated deposit accounts based on data from the netting step; and updating, by the computer, the database based on the allocation of client funds.
 2. The method as defined in claim 1, further comprising: receiving from one of the respective clients, for each respective one of a plurality of the banking institutions, a respective maximum deposit percentage to be held in the respective banking institution for funds of that respective client and storing this maximum deposit percentage associated with the respective client in the electronic database; wherein in the determining step, one or more transfers to, or transfers from one or more of said aggregated deposit accounts in one or more of the banking institutions is determined, at least in part, based on one or more of the respective maximum deposit percentages for the respective one client.
 3. The method as defined in claim 1, further comprising: receiving, from one or more of the respective clients, a respective maximum deposit percentage to be held in the respective banking institution for funds of that respective client and storing this respective maximum deposit percentage as the maximum deposit percentage for that respective client in the electronic database.
 4. The method as defined in claim 1, wherein the withdrawal data comprises data for one or more withdrawals/transfers by check, debit card, credit card or ACH.
 5. The method as defined in claim 1, further comprising: receiving a selection of an order of preference of a third plurality of the banking institutions for deposit of funds of the client; and wherein in the determining step, transfers to one or more of said aggregated deposit accounts are made to the third plurality of the banking institutions in the order of preference selected by the client.
 6. The method as defined in claim 1, further comprising: receiving a selection of an order of preference of a third plurality of the banking institutions for withdrawal of funds of the client; and wherein in the determining step, transfers from one or more of said aggregated deposit accounts are made from the third plurality of the banking institutions in the order of preference selected by the client.
 7. The method as defined in claim 1, further comprising: receiving, by computer, client transaction data comprising data for each of one or more deposits/transfers and/or one or more withdrawals/transfers for one or more of said clients, with the data comprising a respective amount for each respective deposit/transfer and each respective withdrawal/transfer; netting, by computer, on a regular basis, the data for the client deposits/transfers and/or the withdrawals/transfers from a plurality of the clients to obtain the net amount.
 8. The method as defined in claim 7, wherein the transaction data for one of the clients comprises data for more than six withdrawals/transfers by one or more of check, debit card, credit card or ACH within a month.
 9. The method as defined in claim 1, further comprising: determining a respective amount of interest owed to each of a plurality of the respective clients as a function of a total amount of funds of the client held in the FDIC-insured interest-bearing aggregated deposit accounts; and distributing by crediting interest received from said FDIC-insured interest-bearing aggregated deposit accounts to said respective clients based on the respective amounts determined for the respective clients.
 10. The method as defined in claim 1, wherein the electronic database maintains aggregated transaction account information for a plurality of FDIC-insured and interest-bearing aggregated deposit accounts held in a fixed number of banking institutions in a program, and wherein the steps are performed using the fixed number of banking institutions in the program.
 11. The method as defined in claim 1, wherein the allocating step further comprises: (i) determining whether funds of the respective client account held in one of the banking institutions in the one or more FDIC-insured interest bearing aggregated deposit accounts held therein is more than a specified amount; and (ii) generating data for allocating any amount over said specified amount into at least one other FDIC-insured interest bearing aggregated deposit account held at least one other of the banking institutions in which the total of said client's funds will not exceed the specified amount.
 12. A system for managing a plurality of client deposits for multiple clients, comprising: one or more computers comprising memory wherein the memory stores computer-readable instructions that, when executed, cause the one or more computers to perform the steps: accessing, by computer, in the performance of one or more of the following steps, an electronic database, stored on one or more computer-readable media, comprising: aggregated account information for a first plurality of Federal Deposit Insurance Corporation (FDIC)-insured and interest-bearing aggregated deposit accounts held in a plurality of banking institutions, wherein funds from client deposits of a plurality of clients are aggregated with funds of other client deposits in the aggregated deposit accounts held in the banking institutions; client information for each of a plurality of the respective clients, comprising: (i) a total of the respective client's funds deposited across a plurality of the banking institutions in one or more of the FDIC-insured interest-bearing aggregated accounts held therein; and (ii) a maximum deposit percentage of the respective client funds to be held in at least one of the banking institutions; allocating, by the computer, the client funds among a second plurality of the banking institutions in one or more aggregated deposit accounts held therein, based, at least in part, on the maximum deposit percentage in the database for one or more of the clients; netting for at least one of the respective banking institutions, by the computer, client funds allocated to the one respective banking institution to obtain a net amount for the at least one respective banking institution; determining, by the computer, an amount of funds to be transferred to or from one or more of said aggregated deposit accounts based on data from the netting step; and updating, by the computer, the database based on the allocation of client funds.
 13. The system as defined in claim 12, further comprising computer-readable instructions for configuring the one or more computers for: receiving from one of the respective clients, for each respective one of a plurality of the banking institutions, a respective maximum deposit percentage to be held in the respective banking institution for funds of that respective client and storing this maximum deposit percentage associated with the respective client in the electronic database; wherein in the determining step, one or more transfers to, or transfers from one or more of said aggregated deposit accounts in one or more of the banking institutions is determined, at least in part, based on one or more of the respective maximum deposit percentages for the respective one client.
 14. The system as defined in claim 12, further comprising computer-readable instructions for configuring the one or more computers for: receiving, from one or more of the respective clients, a respective maximum deposit percentage to be held in the respective banking institution for funds of that respective client and storing this respective maximum deposit percentage as the maximum deposit percentage for that respective client in the electronic database.
 15. The system as defined in claim 12, wherein the withdrawal data comprises data for one or more withdrawals/transfers by check, debit card, credit card or ACH.
 16. The system as defined in claim 12, further comprising computer-readable instructions for configuring the one or more computers for: receiving a selection of an order of preference of a third plurality of the banking institutions for deposit of funds of the client; and wherein in the determining step, transfers to one or more of said aggregated deposit accounts are made to the third plurality of the banking institutions in the order of preference selected by the client.
 17. The system as defined in claim 12, further comprising computer-readable instructions for configuring the one or more computers for: receiving a selection of an order of preference of a third plurality of the banking institutions for withdrawal of funds of the client; and wherein in the determining step, transfers from one or more of said aggregated deposit accounts are made from the third plurality of the banking institutions in the order of preference selected by the client.
 18. The system as defined in claim 12, further comprising computer-readable instructions for configuring the one or more computers for: receiving, by computer, client transaction data comprising data for each of one or more deposits/transfers and/or one or more withdrawals/transfers for one or more of said clients, with the data comprising a respective amount for each respective deposit/transfer and each respective withdrawal/transfer; and netting, by computer, on a regular basis, the data for the client deposits/transfers and/or the withdrawals/transfers from a plurality of the clients to obtain the net amount.
 19. The system as defined in claim 18, wherein the transaction data for one of the clients comprises data for more than six withdrawals/transfers by one or more of check, debit card, credit card or ACH within a month.
 20. The system as defined in claim 12, further comprising computer-readable instructions for configuring the one or more computers for: determining a respective amount of interest owed to each of a plurality of the respective clients as a function of a total amount of funds of the client held in the FDIC-insured interest-bearing aggregated deposit accounts; and distributing by crediting interest received from said FDIC-insured interest-bearing aggregated deposit accounts to said respective clients based on the respective amounts determined for the respective clients.
 21. The system as defined in claim 12, wherein the electronic database maintains aggregated transaction account information for a plurality of FDIC-insured and interest-bearing aggregated deposit accounts held in a fixed number of banking institutions in a program, and wherein the steps are performed using the fixed number of banking institutions in the program.
 22. The system as defined in claim 12, further comprising computer-readable instructions for configuring the one or more computers of the allocating step for: (i) determining whether funds of the respective client account held in one of the banking institutions in the one or more FDIC-insured interest bearing aggregated deposit accounts held therein is more than a specified amount; and (ii) generating data for allocating any amount over said specified amount into at least one other FDIC-insured interest bearing aggregated deposit account held at least one other of the banking institutions in which the total of said client's funds will not exceed the specified amount. 